SPIRIT WEEK: While diminishing revenues and talk of a merger have left the staff of the Rhode Island Higher Education Assistance Authority on Jefferson Boulevard anxious as to their future, the staff, clad in their RIHEAA T-shirts, rallied to display their team spirit last week.

Although Gov. Chafee’s proposed budget reverses the trend, persistent reductions in state aid have left the state university and colleges no choice but to raise tuitions, Ray Di Pasquale, commissioner of higher education and CCRI president, told the House Finance Education Subcommittee Thursday.

Di Pasquale said the institutions have made cuts wherever possible and that faculty and staff have taken on extra work to ensure the quality of education to the 41,000 students collectively enrolled at URI, RIC and CCRI is not compromised. Further pressuring URI has been a 485 decline in enrollment with a $5.6 million loss in tuition revenues.

Yet subcommittee chairman Rep. Frank Ferri of Warwick wanted to know what could be done to address tuition and fees that are as much as 9.5 percent higher. He had good reason.

Four students urged the board to halt the increases.

Calling a college degree “a necessity” and not a choice, David Coates said he is carrying $22,750 in college loans. He asked that tuition increases be stopped and for the board to act to avoid this impending crisis that is putting higher education beyond the reach of many.

CCRI student and the student member to the Board of Governors of Higher Education, Tessa Constant, bent on one knee to symbolize her plea to stop the increases. She said most students “are hurting.”

“Go back and ask for more [funding]; we need help,” she pleaded.

More appeals came from Danielle Dirocco, a single mother with two children who, after losing her job, returned to college to improve her chances of gaining employment. She is a graduate student at URI. She said she is carrying $57,000 in student loans. “I don’t see a future working out,” she said. “Please, no more, it has to stop.”

URI student David Pickard said he has $20,000 in student loans and still has a year to complete his degree.

But while the message from students was clear, debate centered on the governor’s budget for higher education, which increases funding by $12 million to $177.6 million, and, in particular, the recommendation drafted by a committee created by legislators and chaired by Richard Licht, director of administration. The committee was charged with examining higher education and drafting efficiencies through, among other measures, consolidation.

Dubbed “the Licht report,” the plan calls for the merger of the Rhode Island Higher Education Assistance Authority (RIHEAA) with the Board of Governors that oversees the state’s three institutions.

Di Pasquale sees the merger as a means of increasing the board’s existing staff of 13 and $2.6 million budget while enhancing efficiency and avoiding duplication. RIHEAA is basically a self-sustaining operation that, other than receiving $600,000 to administer the state student grant program, derives its operating revenues as a loan guarantee agency. As of June 2010, when the federal government initiated direct loans, those revenues have been drying up. At the present rate, RIHEAA operational costs are expected to exceed revenue in three years.

Nonetheless, with the merger, the Board of Governors (BOG) would gain about 30 positions and operating revenue for about three years. It would also take on the functions of managing the student grant program; Way to Go, a web-based program that has more than 70,000 student users between grades 6 and 12 and oversight of the CollegeBound Fund, a college saving 529 plan managed by Alliance Bernstein, with assets of more than $7 billion. In addition, RIHEAA has about $20 million in reserves.

With the decline in state funding of student grants, which the governor’s budget recommends at $5 million, RIHEAA has augmented grants with CollegeBound Fund proceeds. That amounts to an additional $7.5 million, RIHEAA board chairman Tony Santoro told the committee.

He said with a projected 24,000 qualifying for grants, students would get about $550 each in assistance. At its March 16 meeting, the RIHEAA board voted to augment the amount using about $3.2 million in reserves to fund grants of $700.

BOG board member Eva Mancuso said the board and RIHEAA have a “shared mission” and called the merger a “natural.” She said it would enable the BOG to provide expanded services and to retain a commissioner devoted to the office of higher education, thereby relieving Di Pasquale of his dual roles.

“It will give us more, let’s be creative about it,” she said.

Di Pasquale pointed out the merger would be accomplished without added cost to the state, adding, “this is a very creative approach.”

However, Rep. Eileen Naughton wanted assurances that the reserves, which RIHEAA looks to preserve to assist students, would not get used for other reasons.

“There’s no intention of touching it for operations,” said Di Pasquale. “There are two different pots of money.” He proposed getting together “the education stakeholders to discuss the fate of the $20 million.”

And Rep. Joy Hearn was looking for specifics. How would the merger generate savings and how much?

Mancuso said the BOG would gain a full-time commissioner without returning to the state to finance the position.

Hearn wanted to know what would happen to the RIHEAA building on Jefferson Boulevard.

“The details need to be worked out,” said Di Pasquale.

Licht answered concerns that RIHEAA reserves were at the core of the merger.

“The money isn’t on the table today,” he said. “The governor has no intent to use it for any other purpose.”

Nonetheless, Licht argued to be efficient and effective, the office of higher education needs more resources. He said the Board of Governors serves to unite the presidents of the colleges and the university and has them working cooperatively. He called the BOG “the glue that holds them together.”

In apparent response to those who advocate eliminating the BOG and for the institutions to each have their own board of governors, Licht said, “The real savings come from a strong administration at the board of governors.”

General treasurer Gina Raimondo, who serves on the RIHEAA board, in a letter to the committee urged further study of the merger.

The subcommittee adjourned without action on any of the governor’s budget articles.

Editor’s note: John Howell, who reported this story, is a member of the RIHEAA board of directors. He serves as secretary.